In a deal combining two primary-care technology companies, Boston-based Iora Health is being acquired by San Francisco firm One Medical in an all-stock transaction valued at about $2.1 billion.
The acquisition will allow One Medical to expand its offerings deeper into the Medicare market, where Iora works with more than 38,000 patients ages 65 and older through a full-risk model, meaning its members pay a fixed rate for care each month. The merger is intended to expand One Medical’s reach, giving it access to more patients across different geographies at “every stage of life,” according to Amir Dan Rubin, the chief executive of the company.
The idea is that the two companies could potentially offer services to different patient populations, eventually using One Medical to directly source Iora Health patients when they are eligible for Medicare. The deal will expand the combined company’s health center footprint into 28 markets and give it a member base of more than 630,000 people.
Iora has nearly 50 primary care centers across nine states, including one in Hyannis, and has about 600 employees. One Medical, which became a public company last year, operates more than 100 centers, including four in Boston, and has nearly 2,000 employees.
Iora Health was founded in 2011 by Dr. Rushika Fernandopulle, the company’s chief executive, and entrepreneur Christopher McKown, the husband of Abigail Johnson, the chief executive of Fidelity Investments. The company has focused on offering a more personalized approach to primary health care. Providers spend up to an hour on every patient appointment so that they can form relationships with patients, aiming to drive down costs by offering better, preventative care.
Fernandopulle will become One Medical’s chief innovation officer when the deal closes, which should happen by the end of the year. Iora shareholders are expected to own about 27 percent of the combined company. One Medical reported in its annual report with the Securities and Exchange Commission that 14.3 percent of the company is owned by the parent company of Boston financial services giant Fidelity Investments.